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Amylin, Alkermes Diabetes Drug Delayed by FDA

[Updated: 8:38 am Eastern, 3/15/10] Amylin Pharmaceuticals and its partners Eli Lilly and Alkermes are going to have to wait a while to celebrate. The FDA has delayed an application from San Diego-based Amylin (NASDAQ: AMLN) and Indianapolis-based Eli Lilly to start marketing their new diabetes drug, the first once-weekly shot, as a more convenient alternative to control blood sugar.

The silver lining is that the drug, exenatide once-weekly, doesn’t need to pass any new animal tests or clinical trials before it can be cleared for sale in the U.S., the companies said today in a statement. The FDA’s “complete response letter” raises issues around finalizing the prescribing information that guides physicians, along with a Risk Evaluation and Mitigation Strategy (REMS) program and “clarification of existing manufacturing processes,” the companies said. The FDA raised some issues at a December inspection of Amylin’s Ohio manufacturing plant, although those have been addressed, the companies said.

The drug application is being closely watched because it takes the active ingredient in Amylin’s best-selling drug and combines it with a biodegradable polymer technology from Waltham, MA-based Alkermes (NASDAQ: ALKS) that makes it last longer in the blood. That polymer is the difference between an existing drug that must be injected twice a day and the newer form, which only requires one shot a week. The product will be marketed under the name Bydureon, the companies said.

[Updated company comment, 8:38 am Eastern.] The companies have already begun working on their response to the FDA letter, and expect to submit answers within a few weeks, Amylin CEO Dan Bradbury said in a conference call this morning. “We have a clear path forward,” Bradbury said.

Amylin has the most at stake in the FDA’s decision to approve exenatide once-weekly, since it only has two other approved products, and the new drug is poised to drive its earnings for years to come. Alkermes stands to collect a 7.5 percent royalty on worldwide sales of the drug, without having to pick up any expenses for marketing or manufacturing. The drug is likely to generate peak worldwide sales of about $2 billion in 2017, according to JP Morgan analyst Cory Kasimov. An estimated 25 million people in the U.S. suffer from the chronic disease.

Investors appeared relieved that the FDA’s issues can be resolved relatively quickly. Shares of Amylin climbed about 5 percent in pre-market trading to $21.25 at 8:08 am Eastern time after the announcement.